Name That Principle

Anti-Statism
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It’s not merely important to have principles, it’s important to name them.

Name them well.

One of the central insights of the French Liberal School of economics — and, since that school’s heyday, all of free-market economics — has not, to my knowledge, been given a technical name. Or, at least, a technical term that’s good enough. The principle in question is that of overlooking the unseen effects of an event or a policy in favor of the immediate, positive effects on the chief beneficiary. Bastiat wrote about it in “That Which Is Seen and That Which Is Unseen.” Classic essay.

The basic notion has been recently described in a fairly rigorous way as the problem of dispersed costs and concentrated benefits. Surely someone has called this The Principle of Dispersed Costs and Concentrated Benefits, or somesuch. But I’m not aware of a pithier academic formulation that sticks. In my head, anyway.

And, getting it to stick is important. People forget, otherwise. And what’s the use of a principle that people forget?

So I’ve reformulated the problem as a cognitive bias …

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The Perils of Giving Presidents Credit

Science, Taxation, Technology
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Co-blogger Ryan McMaken is quite right to give President Obama credit for cutting the space program.

Sadly, however, it looks like Obama is already backing down on those cuts.

No surprise there. If Obama thinks it’s okay to spend trillions on everything else, how can he justify cutting this? It’s not like budget constraints have meant anything to him otherwise. In Obama’s world, if something is important, then you spend government money on it without regard for the budget (much less the impropriety of spending other people’s money). So when he comes under fire, what can he do? Say that he doesn’t think space travel (or science) is important? Of course not.

Under a new proposed compromise, the government will still build the Orion rocket that it had intended to use for new moon missions — it just won’t send it to the moon. Instead, the Orion will go to the space station and then just sit there in case we ever need it as an “escape pod.” (Really.) That way we can still show our commitment to space and science and stuff, and the military-industrial complex and NASA employees will still get paid.

But what about all the expense? Not to worry. The WSJ informs us that by not scrapping the Orion program, Obama “will help Lockheed and the government avoid significant termination costs associated with shutting the Orion project down.”

Phew! Glad we taxpayers (and especially Lockheed Martin!) will now avoid all those costs of… not spending anymore.

(Cross-posted at LRC.)

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Obama Does One Decent Thing: Cuts Space Budget

Science, Taxation, Technology, War
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Obama has done one decent thing and moved to cut funds to the space program. Neil Armstrong has condemned Obama for it. There are two thoughts that immediately come to me as a result: 1. “So what?” and 2. “Who cares what Neil Armstrong thinks?”

Arguments in favor of the space program are based on two things: sentimentalism and militarism. The militaristic argument is the more sophisticated one. The space program, behind its veneer of civilian purpose, has always been a military program founded to improve rocket technology, and eventually, to provide the United States with military superiority over space itself. The sentimentalism is the rationale that most Americans subscribe to as they get misty eyed over fantasies about “the human spirit” and “destiny” and all those other concepts from Hollywood adventure films.

From a pragmatic point of view, the space program is nothing more than a massive socialist spending program with militaristic intent, but which benefits handsomely from hysterical and maudlin appeals to hope in the government’s ability to accomplish anything provided enough time and taxpayers’ loot. …

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Should Employers Be Allowed to Check Your Credit?

Business, Nanny Statism
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Should employers be allowed to check job applicants’ credit reports?

I debated that question on CNBC’s Street Signs today:

Of course employers should be allowed to check applicants’ credit. Why should they look only at the biased information you put on your resume? Credit reports provide a fuller picture.

My debate opponent, consumer advocate Joe Ridout, pointed out that there aren’t any statistical studies that show a correlation between bad credit and employees who rip off their employers. But why should we need such studies? How about a little common sense, which tells you that, say, someone who is routinely late in making payments just might be late for work?

The consumer advocates’ argument rests on the assumption that businesses are irrationally discriminating against applicants with bad credit.

But if we just assume that businesses are greedy and care only about making money — which, I think, the consumer-advocate types would normally grant us — then why would they spend money on credit reports that have no value? Do “consumer advocates” really believe that they not only know what’s best for you and me, but also know what’s best for businesses’ bottom lines?

Finally, let’s not forget the people with good credit and what a great service credit reports perform for them. A clean credit report lets you carry your good reputation with you wherever you go. Because of this market innovation, it doesn’t matter if you move to a new town where you don’t know the people at the bank or at your prospective employer’s office. They can check your report and see that, to that extent, you seem to be dependable.

It would be a shame if misguided activists and pandering politicians took some of this benefit away.

(Cross-posted at the Mises Blog.)

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Statist The-daism

Anti-Statism, Political Correctness, Statism
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Political correctness is not the only source of damage to language. Indeed, outright implicit statism has been around much longer than PC. Take, for example, a common question asked when people move: “How are the schools in your area?” By this they of course mean government schools. Then there is the space program (NASA primarily), the post office, the police, the roads. These endless the-daisms are the not unexpected result of the monopolization of goods and services by the state.

The vast majority of people take these the-daisms for granted. One would suspect, however, that unless you lived in a heavily statist society, the majority of the population would reject the idea of having a single provider of homes, food, media or news. “How is the housing in your district?” or maybe “How is the grocery store?” In some states that’s already the case for liquor stores.

Even in industries where there is some competition, such as media distribution companies, we see the-daisms: the phone company or the cable company. Due to government intervention, these providers often obtain the monopolistic, legislative right to operate in a certain area, shutting out potential competitors.

It would sound ridiculous to ask about “the pencil system” or “the restaurant system.” Yet it is somehow perfectly fine to have, or to want to have, a uniform, government health system — the health care system. How unfortunate.

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